Moral Disengagement in Organizations

In a recent interview with Barbara Walters of ABC News, Bernie Madoff didn’t have much concern for the victims of his massive fraud, though was deeply worried about the impact of his actions on his family. He said in the interview – “I understand why clients hate me. The gravy train is over. I can live with that.” He added -”The average person thinks I robbed widows and orphans. I made wealthy people wealthier.” Even after imprisonment, he is morally disengaged. He justifies that defrauding the wealthy is okay and not that big a crime.

How does a normally functioning human being become morally disengaged to an extent that all crimes done by him or her appear rational? The thinking is that the end justifies the means and criminal behavior is not a big deal. Let us explore the impact of moral disengagement on human behavior and its impact on organizations.

In the paper “Moral Disengagement In The Perpetration Of Inhumanities” the author Albert Bandura states – “Moral agency is manifested in both the power to refrain from behaving inhumanely and the proactive power to behave humanely. Moral agency is embedded in a broader socio-cognitive self theory encompassing self-organizing, proactive, self-reflective and self-regulatory mechanisms rooted in personal standards linked to self-sanctions.” Hence, the control for moral behavior rests with the individual. The negative self-sanctions for behavior that contravenes a person’s personal ethics and values stops them from behaving inhumanely. Even in situations when there is sufficient inducement or anticipated reward for doing so.

However, if the self-sanctions are missing or a person does not feel self-condemnation for inhumane behavior towards others, the person will willingly participate in inhumane activities. To ignore self-sanctions, a person gives himself/ herself a moral justification for the inhumane act. They tell the story to themselves that they are acting as moral agents to protect some higher goal by harming others. This is evident in case of riots and religious wars in society. To establish supremacy of their religion or race, they justify harm to people of other race and/ or religion.

In organizational context, it is evident when one victim is bullied by a group of employees for belonging to a certain race, religion, gender, sexuality etc. In such cases, inhumane behavior becomes socially acceptable.

Moreover, besides the aspect on which a person has justified inhumane behavior, a person can still be morally engaged in other aspects. Mr. Bandura states – “Selective activation and disengagement of personal control permits different types of conduct by persons with the same moral standards under different circumstances.” Madoff’s thought process exemplifies it. He is concerned on the suffering of his family members but not of his victims.

Additionally, people are mostly unaware of the changes in their thought pattern and behavior. They start with mild aggression or a small crime and these pricks their conscience. However, gradually they get used to doing inappropriate things and harming others without any self-criticism or loss of self- esteem. The ruthlessness increases and with it the atrocities on the victims. Once this sets in, it is difficult for them to stop without some external intervention as morally they have justified their acts.

The question remains – how are normal people motivated to do atrocities to others? Here are some ways mentioned in the research paper that people use to perpetuate inhumane behavior.

1.    Spreading tales

It is the communication skills of the charismatic leaders who are morally disengaged that influences public to compromise on moral behavior. Hitler’s speeches roused many to conduct the worst possible inhumane acts. Under normal circumstances, the same people may not have done any crime.

The story used can influence many. For example, in the corporate world rumors are spread about employees who maybe on the verge of finding senior management involvement in frauds. The unethical team to damage the reputation of ethics officers and risk managers does a defamation campaign. The facts get buried under the false story and rumors. The ethics officers are portrayed as liars.

2.    Use of twisted logic

Under normal circumstances, a person is unlikely to indulge in inhumane acts towards others especially in public view. Besides self-condemnation, the person will be scared of society’s judgment and boycott. However, to influence a group to conduct a crime, one can give the logic that achieving the goal through legal means is not possible. This logic is used in investigations, where suspects basic human rights are contravened by the police on the pretext that suspect will not disclose the truth on verbal interrogation.

In the corporate world, corruption and bribery are prime examples of it. Many a times organizations consider corruption is justified for conducting business and earn profits even if it means risking lives. As seen in the Common Wealth Games fraud, a bridge collapsed. A few passerby’s died and some were injured. Reason being the material used by the construction company was sub-quality.

Organizations also pay bribes and grease payments using the same logic. According to them, the work or project will get delayed if the organization obtains the required permissions through proper channels. A few organizations in India are also known to threaten physical harm to government officers and their own employees to get their work done and avoid legal channels. Justification is, why bother with legal contracts or proper means. Here the end justifies the means.

3.    Using historical incidents

The saying goes- you are not guilty unless you are caught. This logic is used frequently for influencing people to use inhumane methods to achieve goals. If in a previous situation, illegal means were used to achieve a goal, and the team was successful, the same methods will be used again.

In such situations, the assessment of the situation is biased and the conflicting realities of the situation are ignored. The domino effect of a crime conducted repeatedly in an open social environment is huge, and prone to miscalculations. However, in such situations the sociological impact and the gravity of the situation are misinterpreted.

In corporate world, this occurs when deviant organization culture sets in. For example, X person has conducted a crime and Y is innocent. However, X is not punished and Y is punished. This gives encouragement to wrong doers that they will get away with criminal behavior and the victim will face the brunt of it. If this management laxity continues, slowly more and more staff will turn towards criminal activities. In the long run, the staff will start showing criminal behavior towards the management itself. Hence, the management gets trapped in its own negligence.

4.    Displacing responsibility

The reasoning given by perpetrators of inhumane behavior is- “I am not responsible for it, the senior sanctioned it, and I am just following orders.”  In such situations, the group members will not take responsibility for their inhumane and detrimental behavior towards others as long as some authority figure takes ownership for it. The members will ignore the suffering and harm caused by them to the victim.

Bandura states- “the greater the legitimacy and closeness of the authority issuing injurious commands, the higher the level of obedient aggression. The sanctioning of harmful conduct in everyday life differs in two important ways from the direct authorizing system examined by Milligram. Responsibility is rarely assumed that openly. Only obtuse authorities would leave themselves accusable of authorizing harmful acts. They usually invite and support harmful conduct in insidious ways for personal and social reasons. Through surreptitious sanctioning practices they can shield themselves from social condemnation should the courses of action go awry. They also have to live with themselves. Sanctioning by indirection enables them to protect against loss of self-respect for authorizing human cruelty.”

 Hence, in such situations the victim suffers while the authority figure is removed from direct contact. Therefore, the authority figure doesn’t suffer from self-recriminations for sanctioning humane cruelty and the members who execute the cruel behavior displace their responsibility to the authority figure. This generally takes place in the corporate world when authority figures sanction serial bullying or stalking of a victim to achieve personal goals.

5.    Defusing responsibility

When a number of people are involved in a crime, then no one person takes responsibility for the crime. Each person is doing one small negative act on the victim and the cumulative total impact of the negative actions is nobody’s responsibility. This is primarily illustrated by the cyber bullying that has become prevalent in the present world. Last year a couple of school kids committed suicide due to cyber bullying.

Secondly, diffusion of responsibility is easier on internet as it allows anonymous ids and one can attack the victim through these anonymous ids. Since the real individuals behind the attack cannot be easily identified, they are emboldened to degrade the victim. They may not make the same statements on the victims face since then it amounts to publicly accepting perpetuating heinous crimes.

In organizations when an employee is mobbed the responsibility is diffused since each employee is doing one small act. If the mobbing continues for a long time, then most participants get immune to their own negative actions, suffer no guilt or remorse and consider it an operational function. The activities get routine and their morality is not questioned. Under group responsibility, people are crueller, sometimes competition sets in as to who can be more cruel and none of the members hold themselves personally accountable for their actions.

6.    Disregard or distortion of consequences

If you hear any abuser, be it a perpetrator of domestic violence or anything else, the victim is said to be weak. In cases of psychological abuse and torture, disregarding consequences of one’s behavior becomes easier. The perpetrator states the victim is – making it all up, is attention seeking, a crybaby, can’t deal with the adult world, psychologically weak, can’t deal with pain etc. To distort the consequences of their own actions, abusers give these excuses.

This way they minimize the impact of their own actions so that they don’t have to feel guilty. If minimization doesn’t work, then stories are told to discredit the victim’s pain and suffering. It is easier to harm when the injuries are not visibly evident that is why psychological abuse is so prevalent.

In organizations, as per report 50% of the staff experiences bullying and 5-10% are so deeply impacted that some commit suicide and some never go back to work again.

This can become a wider problem as seen in the financial crises and mortgage foreclosure problems in US. The bankers discarded the fact that due to their negligence a number of their customers had become homeless due to no fault of theirs. Even in the financial crises, bankers failed to acknowledge that their high-risk taking resulted in the crises. The financial crises resulted in job losses of thousands but the perpetrators didn’t consider themselves guilty. On the other hand, a few rewarded themselves with big bonuses.

7.    Dehumanization

The last and the worst method to use are to dehumanize the victim. It is difficult to mistreat friends, neighbors and colleagues, as one knows them. There will be some level of self- reproach and condemnation. However, it is easier to mistreat a stranger since an unknown person doesn’t generate an empathetic response.

Therefore, it is easier to brutalize people when they are viewed as sub-human forms and are degraded completely. If a person is disposed of their humanness, and equated to an animal, then self-censure doesn’t get activated. Hence, the aggression is escalated and continues unabated.

In corporate world, this occurs in autocratic and bureaucratic organizations where the power holders or senior management considers their juniors as less than human. They believe that juniors are there to obey orders and do as they are told. The juniors have no personal desires, life and rights. In such situations, people with authority use coercive power since they cannot be held accountable. As Gareth Morgan in his book “Images of an Organization’ says- that some organizations have a worse culture than Soviet KGB.

To illustrate, Maruti is facing a labor strike, though previously it was known as an employee friendly organization. One of key complaints of workers is that they get just 30 minutes for lunch and two breaks of 7 minutes each for tea/coffee. They are complaining that in an 8-hour shift they sometimes don’t have the time to use the washroom also. Maruti management brought in the changes to increase production of cars at the existing facility.

Conclusion

Bandura says that – “Justified abuse can have more devastating human consequences than acknowledged cruelty. Mistreatment that is not clothed in righteousness makes the perpetrator rather than the victim blameworthy. But when victims are convincingly blamed for their plight, they may eventually come to believe the degrading characterizations of themselves” This is horrifying and unless the victim has a high self-esteem, s/he might believe that they deserve to be treated in a sub-human manner.

Risk managers and ethics officers can find themselves as victims as they fight for what is right and just. They are sometimes punished for their convictions and principles by management. Some bend under the social pressure and some deal with the conflict.

However, viewing it from different lenses, moral disengagement is a huge problem for the corporate world. Self-sanctions and individual moral control appears to be the strongest restrainers for inhumane acts. Hence, we must remember C. P. Snow words when obeying orders –

“More hideous crimes have been committed in the name of obedience than in the name of rebellion.”

References:

  1. Bernie Madoff ‘Can Live With’ Fraud Victims’ Anger, But Not Family Scorn, He Tells Barbara Walters Exclusively

2.  Moral Disengagement In The Perpetration Of Inhumanities by Albert Bandura, Stanford University

Women Risk Managers and Power Games

“Be it known that we, the greatest, are misthought.” By Cleopatra

Recent issue of Business Today magazine named the womanpower in corporate India. My favorite corporate queens were as usual amongst the top – ICICI Bank CEO- Chanda Kochar, Axis Bank CEO- Shikha Sharma and HDFC Executive Director – Renu Sud Karnad. Their success in the financial field is inspiring and one has to meet them to understand their acumen. However, the magazine article – “The Most Powerful Women in Indian Business” started with the following line:

“For generations, the choice between domestic idyll and a career has been the unique dilemma of women”

Yawn!  Uncreative journalists typecast even the most successful women.

Men don’t suffer the same fate. During my teens, my father was a single dad and a Chief Engineer. Dad would have beaten the life out of the person who dared to suggest that he couldn’t do both efficiently. (Psst, I did overhear dad sometimes exasperatedly say to his friends – “Looking after one rebellious teenage daughter is more difficult than managing ten dam sites”. But let us ignore this, I always did.) Alas, if women took such a stance they become supposedly unfeminine.

My perspective is that women entering finance line after doing a chartered accountancy or MBA (Finance) course are already mentally prepared for the roller coaster ride. So, I thought of the real career related challenges female risk managers face in their path to growth. Here are three situations in different stages of career. While I can’t say this is gender specific, men can face similar situations too, but possibility of women facing it is higher.

1.    The Young Professional

At the start of my career, a batch mate of mine, an exceptionally beautiful woman with a razor sharp mind excitedly called me at office. The edited conversation for you:

She: Sonia, at this audit client site I have met X guy. Very intelligent and suave. He came to the auditor’s room and chatted with me for an hour.

Me: Wow, I am happy for you. What next?

She: He invited me for a date.

Me: So are you going?

She: I have started investigating his department.

Me: Shit! Does he know?

She:  No. Whenever I see him, I give a big smile and bat my eyelids.

She was right on track. Investigations revealed that he was conducting a big fraud. This social trick has been used on nearly every young female auditor and investigator. Men think they can charm the wits out of women and hide their criminal activities. A woman would be too distracted to pursue her assignment properly. The distraught admirers are incommunicado after issue of the report.

2.    The Mid-Senior Level Professional

Consulting companies hire the better of the lot of experienced female risk managers. A consultant has to deliver high quality consistently otherwise, they will lose the client. Hence, meritocracy prevails in selection and recruitment.

However, the mindset is significantly different in the Indian industry sector. Some companies want to hire not so bright women (or men) as risk managers.  The male managers think that women are more compliant, less assertive and more controllable. Hence, a female risk manager will be more agreeable to their demands if they wish to pressure her.

Quite frequently, business executives want portions of the risk reports deleted and/or altered. They want to hide the inaccuracies, wrongdoing and frauds from CEO/Board. They assume that female risk manager can be bullied easily into a compromise, as she is far more vulnerable than male colleagues are.

Depending on the organization culture and situation, things can get nasty for women. In the Indian environment, unscrupulous business executives can destroy a woman’s personal and professional credibility easily by spreading rumors about her love life.

As India is a conservative male dominated society mindset is that if a woman has two lovers she is a whore, and a man with hundred lovers is great in bed. (Psst, who are the men having affairs with?) Hence, if a married woman is rumored to be having an office affair and her husband hears of it, she sometimes ends up paying a heavy price for it. A single woman’s reputation of independent reporting can be easily destroyed if it is rumored that she is having an affair with office colleagues. Most women risk managers leave their jobs and career at this point. There are only a few sophisticates who nonchalantly brazen out these situations.

3.    The Senior Level Professional

Breaking the glass ceiling with three inches heals is tough for Indian women on the whole and especially for the risk managers. The top order is still a male bastion. Though, a couple of times I have caused cracks in the ceiling, the top job is elusive. The best thing about failures is that they give an insight on the reasons for failure. I learnt a couple of lessons from them.

The men’s club at the top has the most political influence. Unfortunately, even senior female risk managers are not part of the group. Hence, they only get second-hand information of the political games being played. This puts them at a disadvantage in comparison to a male competitor. As he is part of the group, he can make the right political maneuvers. On the other hand, a female risk manager needs a mentor who fights her case with the group.

The second aspect is that if a female is not part of the group, they don’t trust her. In most organizations, a CEO’s direct reports have the most power and they only share it with people whom they trust. They are wary of risk managers as they have access to sensitive information of all departments and can break a few high profile careers. Hence, the CEOs direct reports generally do not approve the appointment of a risk manager who is loyal to the CEO and/or does not belong to their group. That situation makes them vulnerable, especially if they are involved in unsavory activities.

Therefore, a female risk manager succeeds in taking the top slot only when a whole number of situations are in favor of her. Her soft and technical skills are just one aspect which helps her in climbing the ladder.

Closing Thoughts

In India, female risk managers occupy less than 5% of senior risk management positions in industry and consultancy. While the regular gender diversity concerns remain, female risk managers face a few more challenges due to the nature of their job. The dedicated ones continue to persevere and fight the battle. Their passion ensures success.

Again, in Cleopatra’s words –

“All strange and terrible events are welcome, but comforts we despise.”

Building an Ethical Work Culture in Indian Organizations

The Business Enterprise magazine published this article in July 2011 issue

I have often pondered on whether adults can be taught ethics. As per crime triangle a person commits a crime when three factors are present – opportunity, reward and rationalization. Hence, if the opportunity is available with a lucrative reward, psychologically a person can rationalize a crime. Due to this, in context of India, teaching business ethics is a seemingly impossible task. The psyche of the society shows that corruption is acceptable way of getting ahead in business. The 3.3 rating in Corruption Transparency Index indicates that people are unwilling to take a corruption and crime free road. In their minds there is no positive take-away or reward for becoming honest and ethical. Hence, the challenge is to change CXO’s and employee perception about business ethics through promotion and prevention tactics.

Every dark cloud has a silver lining. In light of recent corruption scandals in India, corporate honchos are now concerned about governance issues. Economic Times on 13 June 2011 published survey results  on impact of scams on Indian economic growth. CXOs of 75 companies participated in the survey.  “72% have that sinking feeling that this crisis in governance is going to hurt economic growth. A majority of those surveyed feel the situation is serious enough to affect their business and investment plans in some manner; and 15% expect their plans to take a major hit.”  In the scams Central Bureau of Investigation is investigating a few known groups – ADAG, Tata, Essar, Unitech, Cisco etc. Corporate bigwigs have finally acknowledged that they are part of the problem. The survey states that - “Some 72% of respondents to the ET-Ficci survey and 64% of the CXOs who responded to the ET-Synovate poll feel that business houses are also responsible for the crisis of corruption”

The business heads realization that both the supply and demand side parties are responsible for corruption and unethical behavior can down-rail economic growth of the country is a positive sign for business ethics managers in India. Finally, they can get budgets for business ethics programs and trainings approved. It is a good to strike while the iron is hot. Here are my top three focus areas for improving an ethics program

1.    Build ethical culture into business processes and strategy

One of the business attitudes in India is that business cannot be done without paying bribes, hence receiving kickbacks is justified. The mindset is that an ethics program is not practical as business will suffer. For business growth some compromises need to be done. This thinking makes a code of conduct a document without much strength. Ethical behavior is considered insignificant in evaluating managers’ performance.

Hence, the need of the hour is to build ethical culture as part of business strategy. Processes for monitoring ethical behavior need to be implemented. For example, performance appraisals of employees should incorporate bonus points for the ethical means adopted to meet targets. If unethical methods are used to achieve targets some penalty points should be awarded. In recruitment itself, reject candidates who have falsified information even slightly.

 Next, in a few cases senior managers formulate strategies considering the political connections and propensity of politicians to accept bribes. Ethics managers must change this attitude of senior managers. Do this by assessing growth and risks on parameters of clean business operations. Present a business case to senior management emphasizing the political, legal and reputation risks in case unethical practices are adopted for implementing business strategies.

2.    Change Mindset of Employees

In India, even a youngster will tell you that it is practical to be corrupt. If a person speaks of ethical behavior, the person is most likely to be viewed as an idealist with their head in the clouds. This cynicism makes it difficult to implement an ethical work culture.

I could not find India specific data to illustrate my point. However, I did find a report “Character Study Reveals Predictors of Lying and Cheating” conducted by Josephson Institute. The results indicate that cynics are -“Three times more likely to lie to a customer (22% vs. 7%), inflate an expense claim (13% v. 4%), or inflate an insurance claim (6% vs. 2%).  Additionally, cynics are more than twice as likely to conceal or distort information when communicating with their boss (24% vs. 10%).” India has a huge number of cynics. Unfortunately, the business cost of this cynical attitude is never analyzed by organizations.

Organizations need to give ethics training to change perceptions and thinking. Providing classroom training or e-learning is not sufficient. Ethical training should involve group discussions, case studies, brown bag sessions and 1 to 1 meetings with senior managers to emphasize the importance of ethics. Secondly, ethics managers believe that once training is given their job is done. This thinking is incorrect. They should implement measurement and evaluation methods to judge the impact of training in employee behavior and decision-making. Lastly, ethics training is an ongoing process, not once in a blue moon session.     

3.    Make Code of Conduct Relevant

In my opinion, most of the organizations have a code of conduct that employees sign at the time of joining the organization. New recruits receive a brief overview of expected business conduct in the induction sessions. However, rarely organizations’ code of conduct is a living document. It is not unheard of that the code of conduct is too old and policies mentioned in it are not complying with the prevailing business and legal laws. The situation is that nobody bothered to update it regularly. Hence, these documents are not taken seriously.

In my view, this is a good time to review the code of conduct and implement the policies properly. For example, although organizations have sexual harassment policies, India reports one of the highest cases of sexual harassment. As per a recent report India is the fourth threatening country in the world for women. This clearly indicates that most organizations prohibit sexual harassment only in theory. As the procedures for filing a legal case are long drawn out with high social harassment, organizations may not feel the need to implement the policies. This definitely harms the ethical culture of the organization and the business environment of the country.

Closing thoughts

To make Indian organizations globally competitive at par with the multinationals building an ethical culture is a necessity. The war of talent is won by organizations that provide a comfortable and secure work culture to employees. Multinationals invest in organizations where they are sure of the ethics of the management teams. Customers prefer organizations fulfilling their corporate social responsibility. Look from any lens, adopting ethics pays in the long-run. This is the right time to do some internal selling and get management commitment for building an ethical work culture.

References:

1. Scams have hobbled reforms and economic growth is in peril: ET Survey
2. Character Study Reveals Predictors of Lying and Cheating by Josephson Institute

An Indian Perspective on Affirmative Action

India continues to face challenges relating to caste, religion and gender inequalities. The question is how society creates a more level playing field where there is equal opportunity for all. Indian government has introduced various reservation bills to improve the status of backward classes and women. According to the XI Planning Commission Mid-Evaluation report on Social Justice the government strategy is targeted towards “providing social empowerment, economic empowerment and social justice to ensure removal of disparities and elimination of exploitation”.

The issue discussed in this post is that in light of huge disparities is affirmative action by government the right approach. Would you consider it socially ethical? To put forth my views I am first providing some background information on income disparities and gender inequality problems in India. In the end, I have added Michael Sandel’s lecture video on “Affirmative Action”. It is an hour-long lecture and discusses the ethical dilemmas relating to affirmative action.  

 Indian Social Structure

Amongst Hindus, the Brahmins were according to Hindu philosophy superior to the other three castes. The Harijans/Dalits now called scheduled castes, scheduled tribes and other backward classes were considered untouchables belonging to the lower caste order. This caste differentiation was abolished after independence, however differences in education and financial status continue. Same problems prevail in Muslim community. Not only are Muslims earning lesser, they have lower education levels, and culturally higher restrictions on women. According to 2001 Census scheduled castes, scheduled tribes and minorities consist 42% of the total Indian population.

The income disparities continue to be huge. As per Planning Commission assessment 27% Indian population is below poverty line and in the top 10-world billionaire Forbes list of 2011 there are two Indians, Lakshmi Mittal and Muskesh Ambani. Successive governments have partially succeeded in running various programs for backward classes by reserving seats in educational institutes and government offices. The irony is that lower caste Hindus who adopted Islam or Christianity to get rid of the cursed caste tag, now wish to be classified as Dalit Muslims and Dalit Christians to leverage the advantages of reservations. 

Status of Women

India was one of the few countries that in its constitution provided equal rights to women. According to Hindu religion women are avatars of goddesses. In Hindu religion, the three main representatives of God are Lord Brahma, Lord Vishnu and Lord Shiva. Respectively their roles are of creator, manager and destroyer of the world. The devis (goddesses) are Durga, Saraswati and Laksmi. The goddesses bestow power, knowledge and wealth to their followers. Delving in the Hindu philosophy shows that women are considered equal.

In the present scenario, one would assume that Indian women would be in a better position. A few women hold politically powerful positions. Ms. Pratibha Patil is President of India, Ms. Sonia Gandhi is leader of the ruling party Congress, Ms Sushma Swaraj is leader of opposition party BJP and Ms. Meira Kumar is Speaker of the House.  Four key positions held by women, and the Women Reservation Bill is awaiting approval in Lok Sabha for quite some time.

However, we cannot say no progress has been in made. In the last decade a few laws, namely Prohibition of Child Marriage Act, Protection of Women from Domestic Violence and Hindu Succession (Amendment) Act, have been passed. Still the road ahead is extremely difficult. India has a high rate of female infanticide, dowry deaths, sexual harassment and violence against women.  Therefore, Indian women continue to struggle for equality and fight a multitude of gender biases . To offer support and eliminate such extreme disparities in the Eleventh Plan Ministry of Women and Child Development has Rs 56,765 crores (USD 12,549 million) allocated for women welfare.

India corporate sector is doing no better in promoting diversity. The Economic Times article  “Tough climb for women up India Inc ladder” on Women’s Day stated – “A population of 500 million women, but only 258 of them hold some of the top jobs in the country. That’s how skewed India Inc’s ‘diversity ratio’ is….. There are only 16 women on the board of directors of the 30 Sensex companies, or 4.8% of the 335 people who hold directorship positions”

 The Privileged Class View

Most people would proclaim that effective measures should be implemented for uplifting the underprivileged. However, there is a wide gap between words and actions. The good intentions are not followed through as the social cost has to be borne by the privileged class. The socially affluent have benefitted from the legacy privilege and the belonging to the right network.  The privileged classes do not wish to consider that minorities and women need the extra support since they don’t have the right connections. Reservations for backward classes and women have men complaining that they are being forced to sacrifice their individual rights for society’s betterment. The wrongs were done for centuries, so why does the present generation need to pay the price for it.

 There are a number of arguments for and against affirmative action. Watch the video of Michael Sandel’s debate in class about the subject and decide what the right thing to do is? The same problems persist at global level relating to socially weaker communities.

References:

1. Tough climb for women up India Inc ladder
2. Planning Commission Eleventh Five Year Plan 2007- 2012 – Social Justice
3.  Planning Commission Eleventh Five Year Plan 2007- 2012 – Women’s Agency & Child Rights

Gender Stereotypes & Myths About Women

I listened to the speech on “Gender and the Law Stories: Learning from Longstanding Debates” made by Martha L. Minow, Dean of Harvard Law School. The speech was in honor of Justice Ruth Bader Ginsburg as she made significant contributions to bringing gender equality in America. The topic covered the increasing trend of single sex schools in US in the current decade. Ms. Minow articulately talked about the history of women education, the educational and professional challenges faced by women due to gender stereotyping and biases. I was impressed with the rationale she presented. I am covering some aspects of the speech below along with some of my thoughts on the subject.

Ms Minow mentioned how at one time it was thought improbable for women to enter into fields of law and medicine. In most cases women in 1950’s & 60’s were the first ones to enter the male colleges or professions. The gender bias was strong. Women were denied entrance to esteemed colleges and received rejections from good jobs. Now law and medicine schools have 50% women. The changing times can be depicted by Margaret Thatcher’s statement in 1969 on becoming Tory education spokesperson –  

No woman in my time will be prime minister or chancellor or foreign secretary – not the top jobs. Anyway, I wouldn’t want to be prime minister; you have to give yourself 100 percent.

A few years later, Margaret Thatcher became the Prime Minster. It didn’t change the world much though she proved to be a capable political leader.  Women across the globe continue to battle for equality. They still have to prove it that they can do it. Hilary Clinton became the first women in US to fight for presidential candidate nomination. On losing, in her closing speech she said-

 “Although we weren’t able to shatter that highest, hardest glass ceiling this time, thanks to you, it’s got about 18 million cracks in it. And the light is shining through like never before, filling us all with the hope and the sure knowledge that the path will be a little easier next time.”

Women will conquer all bastions I don’t doubt that. The main barrier continues to be gender stereotyping and various mythical differences perceived by society. Although some men are still depraved enough to consider abusing, degrading and humiliating women as a sign of masculinity, the thought is receding in some parts of the world. Conventional societies, including India, still consider women inferior.

The gender stereotyping starts when a girl is born. A few of them are as follows:

• A girl is soft, a boy is tough, and hence a girl won’t be able to survive in the world without a man.
• A girl is good in arts and literature, and boys are good at math and physics. In India in Class XII boards most of the toppers for science subjects are girls. However, the bias continues in engineering colleges, where numbers of women are less.
• Women are not competitive, lack killer instinct and are emotional in nature. Hence, cannot be successful in the business world. Globally the number of women at board level in corporate world is less than 10%.

Ms Minow mentions that gender biases are so strong that initially in US co-ed schools were not encouraged. It was said boys would be coarse and corrupt girls. The logic given in favor of co-ed schools was that girls would civilize the boys. This argument doesn’t speak well for either of the genders.  

Men have not faced the negative impact of such twisted logic. However, women still face the challenges of typecasting. A woman breaks the conventional myths, she is said to be masculine. Take the example of Indira Gandhi, Ex-Prime Minister of India.  She served as a Prime Minister for 4 sessions totaling to 15 years and is globally the longest serving female Prime Minster. She was called as the only man wearing trousers in her cabinet. Margaret Thatcher was dubbed as the “Iron Lady” by Russia. She gave an excellent rebuttal to it in her speech in Finchley in 1976.

I stand before you tonight in my green chiffon evening gown, my face softly made-up, my fair hair gently waved. The Iron Lady of the Western World? Me? A Cold War warrior?”

 No woman escapes this gender stereotyping, whatever success she achieves. Her femininity is at stake if she rules the typical male bastions. Have you heard of a male politician being compared with stereotypical female traits?

In the current decade with the obsession of biology and psychology, the logic given is that men and women brains are wired differently.  Cordelia Fine in her book “Delusions of Gender” has debunked these pop psychology theories of intellectual and social differences between men and women. She states that there is hardly any scientific evidence available to state men and women behave differently because of the differences in brain.  Most of the areas of performance are touched by cultural stereotypes.  For example, men are not considered good cooks; however, most of the chief chefs in luxury hotels are men. Women in military and police have equal fighting capabilities but there is no evidence that this makes them bad mothers.  Society and not the human brain exemplify these differences.

Ms Minow has explained this aspect far better than I have. I would recommend readers of both genders, especially if they are parents watch the four parts. I am inserting my favorite Part 2 here and am giving the YouTube links for all. Hope you enjoy them.

1. The Justice Ruth Bader Ginsburg Distinguished Lecture on Women and the Law – 2011 – Part 1-4
2. The Justice Ruth Bader Ginsburg Distinguished Lecture on Women and the Law – 2011 – Part 2-4
3. The Justice Ruth Bader Ginsburg Distinguished Lecture on Women and the Law – 2011 – Part 3-4
4. The Justice Ruth Bader Ginsburg Distinguished Lecture on Women and the Law – 2011 – Part 4-4

The Negative Impact of CEO Pay & Power on Corporate Culture and Governance

A recent study conducted by Economic Times of India showed that in 2009-2010 fiscal year, CEOs of top companies earned 68 times the average pay of employees. This has increased around 9 times in just one year. In 2008-2009 fiscal year, CEOs earned 59 times the average pay of employees. Naveen Jindal, Managing Director and Executive Vice-Chairman of Jindal Steel & Power has the dubious honor of receiving the highest salary in India. He earned Rs. 48.98 crores (USD 10.75 million), an income 2000 times the average salary of employees of his company.

Similar studies of top executives’ income in UK and US have shown extreme disparity of income. In US and UK top executives pay is 263 and 115 times the average worker salary respectively. After the financial crises, US and UK governments are working on curtailing CEO salaries. Is the astronomical increase in CEO salary a good trend for India? If not, what are the negative impacts?

Psychology of CEO’s and Top Executives

In the present society, a CXO designation commands respect. A common person attributes a CXO’s success to attitude, skill, intelligence and brilliance. The automatic assumption is that CXOs are better human beings than an average person. Are these assumptions right, does power and money make a human being better? 

 A research paper titled “When Executives Rake in Millions: Meanness in Organizations” discusses the impact of high executive pay. The research shows that high executive pay brings out the mean nature of top executives. It states, “Higher income inequality between executives and ordinary workers results in executives perceiving themselves as being all-powerful and this perception of power leads them to maltreat rank and file workers.” This sounds terrible. Is human nature such that more successful a person is, the less likely he/she is going to be compassionate and empathic to others?

The study indicates that some powerful people perceive those with lesser power as sub-human. Such a person feels reduced empathy, has lesser understanding of emotions and feelings of others, is inclined to objectify and dehumanize others, and sexually harass and degrade workers in lower positions. This person becomes morally disengaged; and tends towards unethical and corrupt behavior.

An article published by The Economist titled “The psychology of power: Absolutely” states the well-known, power tends to corrupt people. Secondly, it states that powerful people are full of hypocrisy. They expect others to behave better, and do not hold their own behavior and actions to similar high standards. On the other hand, they conceive they are entitled to abuse others and break the law. Powerful people disregard law since they consider themselves privileged and believe different rules apply to them. These studies force me to think – does one have to pay the price of power by losing one’s humanity?

There is a reverse rationalization here. When CXOs consider their juniors as less human, the psychology of use and discard sets in. CXOs believe they can deny the employees basic human rights and dignity. Hence, the false sense of superiority of CXOs makes them insensitive to juniors’ pain resulting from their actions. Hence, CXOs terminate employees, deny decent working conditions and harass employees without any sense of remorse. This is illustrated by the fact that CEOs who fired the maximum number of employees during recession in US, received the biggest pay packets. A CXOs false sense of entitlement makes them happy about the disparities. A psychologically normal person would feel guilty at benefitting from another humans tragedy.

In my view, majority of the CXOs are of boomer generation and the probability of Gen X & Y being a CXO is low. Gen X & Y is more likely to be in the lower ranks. Hence, should we consider it destined that boomers will mistreat Gen X and Gen X will mistreat Gen Y. Each generation as they age will become more inhuman towards others. This raises a number of social issues. As we have seen in the last two decades in US, CXOs salaries have increased around 300%. As the social and psychological consequences of income disparity are borne by the society, this is a big concern for India.

Impact on Corporate Culture & Governance

Jeff Skilling, Kenneth Lay, Bernie Ebbers and Bernard Madoff are examples of the CEO psychology gone wrong. From heroes they became villains. Their moral disengagement caused them to break the law without considering the legal consequences of their actions. Their narcissistic sense of entitlement and superiority damaged the corporate culture significantly. This behavior was even transmitted in personal relationships. In an interview, Madoff’s sons had said, “he never thought us as good enough.” A man responsible for stealing billions held his own sons in contempt.

The question that comes up is why do the employees agree and cater to this false sense of entitlement?  Why do they not break the grandiose self-image of the CXO and make him/her see reality?

When employees see the power and sense of entitlement of the CXO, they start believing it to be the truth. Employees concede that the CXO is superior, group consensus and thinking develops on those lines, and the CXO behavior becomes socially acceptable. It is a vicious cycle, when CXOs see employees accepting their negative behavior and attitude, they start believing that they are all powerful and superior human beings. Hence, the whole organization is caught in a psychic trap.

Disconnect with reality results in a harmful organization culture and deteriorating corporate governance norms. CXOs select employees to bully, harass and humiliate to demonstrate their power. The employee’s incapability to fight back caters to the CXOs egos, and they further degrade employees. The other employees from fear of being chosen for same inhuman treatment keep quiet and cater to the CXOs ego. The seeds sown by this behavior grow into a destructive organization culture.

 The study titled “The CEO Pay Slice” shows that there is negative correlation between high CEO pays and profitability of the organization. In comparison to the competitors, companies having higher pay for CEOs showed lower profitability for investors. CEOs with higher pay do not automatically perform better. Results indicate that they make worse acquisition decisions and show weaker accountability for poor performance than other CEOs. Sometimes CEO compensation increases when industry and economic factors are favorable. Hence, the increase in pay maybe attributed to luck instead of better decisions and performance.

This does not augur well for the risk managers in the organization. CXOs with a false sense of privileged status are more likely to disregard business ethics and laws while making decisions. Hence, the organization is at a high risk for legal cases and reputation damage.  In the long run, the lack of focus on organization culture and governmance may cause major corporate disasters.

Recommendations

 The CEO and top executives set the tone at the top. If they are morally disengaged and disconnected from employees, the organization faces some severe challenges. Hence, some solutions are required to address this problem. Here are my recommendations:

i)     The Indian Company Law Schedule XIII defines the method of calculation and limits of managerial remuneration. In my view, the calculation should involve number of times the average salary of workers. This will ensure that some balance is maintained between board, CXO and workers pay.

ii)    Studies have shown that some powerful people tend to hold themselves at higher standards and are lenient to others misdemeanors. Studies on emotional intelligence indicate that emotionally intelligent people are aware of their own and others emotions and drivers. This might sound bizarre, but maybe we should explore methods to keep CXOs emotionally connected.

iii)     The research paper reflected that women are less likely to feel a sense of entitlement or power if they can be mean to a less powerful person. It is a good idea to keep more women as CXOs to maintain a balance and keep senior management grounded.

iv)   Corporate governance norms should include independent board members in compensation committee. This will ensure that a realistic view is taken of CEO and other top executives’ salary. Basing salary structures on performance rather than favorable circumstances is required.

v)    Employees may be empowered by forming trade unions and using whistle blowing lines inside and outside the organization.

vi)   Last but not the least, public should play an active role in curtailing income disparities. The issues should be brought to government and media attention.

References:

1. CEOs of Top Companies Earn 68 Times of Average Employee
2. When Executives Rake in Millions: Meanness in Organizations {Authored by Sheeshadri Desai (Harvard University), Arthur Brief (University of Utah), Jennifer George (Rice University)} 
3. The CEO Pay Slice by Lucian Bebchuk, Martijn Cremers and Urs Peyer 
4. The Psychology of Power – The Economist

Share your opinion here.

Risky Office Affairs

Includes a book review of  “Sexual Detours- The Startling Truth Behind Love, Lust and Infidelity” written by Dr Holly Hein

In my previous article “Poison Ivy in Office” two startling facts came to light. The Economic Times survey results indicated that 1 in 5 Indian is sexually harassed in office. The TeamsLease survey indicated that 1 in 3 Indians see no harm in having sexual relationships in office. Both these surveys indicate a damaging trend in corporate behavior.

There are two aspects to it. While it is normal for singles to be attracted to other singles, and a relationship with a colleague it is considered is positive light. When married people get involved in sexual relationships with co-workers, the organization culture is negatively impacted. The consequences of a sexually charged culture in the organization are:

• High risk of sexual harassment legal cases being filed against the organization.
• Loss of respect for managers who are involved in sexual affairs. Both parties, senior and junior involved in the affair lose their reputation.
• Perception is developed amongst employees that actual performance is not rewarded and one has to have a sexual relationship for growth in the organization.  
• Loss of focus on organizational goals; as employees do not believe they will be rewarded to achieve them.

 With permissiveness increasing in the society, it is considered cool to have adulterous relationships or indulge in serial monogamy. The personal and professional consequences of such relationships are either not understood or ignored completely. The society pays a huge cost with higher rate of divorces and relationship breakups. The cost is borne by the children of single parents and parents having bad marriages.

In some countries (example India) adultery is a legal offence; however it is becoming an acceptable social norm. The public is forming this viewpoint as it is seeing a number of famous personalities having affairs outside of marriage. Considering the above mentioned aspects, understanding the root cause of the human psychology to have second or more relationships needs to be analyzed.

I was reading the book “Sexual Detours- The Startling Truth Behind Love, Lust and Infidelity” written by Dr Holly Hein. In the book she has explained the primary reasons for extramarital affairs. I am covering some of the aspects here, and I would recommend you to read it if you are in a relationship or if it is breaking.

A triangle is formed when a married person enters into a relationship with another outside his/her marriage. The reason a person enters into such a relationship is that they are facing some painful issues within themselves and these may not be related to the marriage. The issues are both intrapersonal and interpersonal, and they prevent intimacy with the marriage partner and the other partner in the affair. The triangle generally complicates and worsens the marriage.

The most common example of a triangle; is of a single woman getting involved with a married man. The common perception is that the single woman is desirable whereas the wife is not; hence the man is pursuing the single woman. The single woman believes that there are some grounds for a relationship since the man is attentive. Nothing could be further from the truth. In a marriage, a person chooses a partner with care. In an affair, a person is not so choosy. A person chooses a partner (target for affair) on the basis of what he/she wants to be and sees those traits in the target. The target may actually not have any of the traits which a person is envisaging. In reality, the person may not be seeing the target clearly. Hence, the affair does not last long since sooner or later the person is disillusioned with the target.

The primary reasons for involving in an affair according to Dr. Holly Hein are:

1. A search for identity – The affair is generally a cover story of hiding our true self. A person has something missing in his/her own identity and needs someone else to validate it for them. Hence, the person tries to look for power, beauty, money, intelligence, status etc. as a substitute for a whole sense of self.
2. An avoidance of life issue- The affair serves as a distraction for some profound life issue. A fling is basically a pleasurable way to deny the conflict within the person. For example, if a person in childhood has felt abandoned by his/her parents, he/she may choose not to acknowledge the pain of abandonment and have numerous flings.
3. An escape from anxiety- Sex becomes a way to relieve anxiety and stress of life. The physical intimacy with another temporarily makes the person feel better. Sex becomes a compulsion as it is used in the same way as any substance abuse. The person avoids emotional intimacy and chooses numerous sexual partners, including prostitutes.
4. A substitute for intimacy- The person feels a fear of emotional intimacy due to some childhood mishap. Sometimes if the relationship with parents is not intimate, due to sense of abandonment, the person may not even realize what emotional intimacy feels like. If the parents were excessively controlling, the person will fear intimacy tremendously. Hence, in both cases a person will use physical intimacy as a substitute. 
5. In search of self esteem- The person’s self esteem is low, maybe because of career, spouse’s constant criticism, lack of success etc. A person needs to feel appreciated and validated by other people is the self esteem is low. The appreciation which a person sees in a lover’s eyes due to the newness of the relationship in a sense restores the self-esteem. However, self-esteem is always internal so basically a person is deluding himself/herself. 
6. A source of power- Sex adopts the nature of a conquest and is a protection against a feeling of powerlessness. It is used to control, defend and manipulate and has a strong sense of aggressiveness. Anger and hostility transform into arousal. The person who uses sex as power remembers constant criticism from aggressive and controlling adults in childhood. An innate dislike and fear of opposite sex is present in most conquests. The hostility that underlies the sexual behavior may be present to the degree that they humiliate, overpower, and overwhelm- even punish- with sexuality. 
7. A way of sustaining status quo- Sometimes affairs are used to keep a marriage going. For example, in India some families consider divorce unacceptable as an option. Under these circumstances, the affair takes a parallel road to marriage. In these the spouse is in a long term affair with/without knowledge of the other spouse and this arrangement is continued to keep stability in relationships. Although, this is incorrect since the partner needing the affair has a problem and is dealing with constant internal instability.

 The seven reasons mentioned above clearly indicate that there is a lot of internal pain which a person is dealing with who is having an extramarital affair. The person’s behavior is also causing a lot of pain to the spouse, children, sexual partners and third parties. This definitely indicates there is nothing cool or glamourous about having an affair when in a committed relationship or with a person in a committed relationship.

Organizations are attempting to deal with office affairs and sexual harassment by issuing policies and guidelines in respect to acceptable corporate behavior. I wonder whether these can be successful without understanding the root cause of the behavior and addressing the same.

In your opinion are these policies effective? According to you, what should an organization do to address the problems of the negative impact of office affairs? How do you think the society should address these challenges? Welcome your comments on it.

Poison Ivy In Office

Women in their attempt to gain financial equality have resorted to power plays and manipulation in the same manner as men. Being a woman, it concerns me that socially the injustice which women were fighting against, they now are subjugating their male colleagues with the same in the corporate world. In this scenario the men are becoming victims with lesser options for justice. Women are showing that they are equally capable of abusing power and compromising moral ethics for ambition. An analysis of the results of sexual harassment and office romance surveys indicate these shortcomings in female behavior in office setting.

A sexual harassment survey was conducted by Economic Times- Synovate, in August 2010 in seven metropolitan cities of India. The results revealed that “one in five Indians has been sexually harassed verbally or physically and half of the respondents said that they have been sexually harassed by their female colleagues”. The other startling fact which came to light was that “38% of the respondents believe that men are as vulnerable to sexual harassment as women”.

An office affairs survey was conducted by TeamLease Services- Synovate in December 2007 in India. The results indicated that 59% of working executives feel women are equal partners in office romances and even they initiate affairs a number of times. The second aspect mentioned is that 44% executives attribute ‘ambition-to-move-up-the-corporate-ladder’ as the reason for sexual relationships. Lastly, one third of the working executives from the corporate sector see no harm in romancing married colleagues.

The two surveys indicate the fallacy of Indian women image of being conservative, principled and demure. With permissiveness and materialism increasing in the society, Indian working women in metropolitan cities are using the same tactics as men to succeed.

I hear men complaining about women. They mumble their complaints and say that even their rights to complain against women have been taken away by the feminist movement, as it is considered politically incorrect. Any man saying something against the female gender is considered chauvinistic, jerk, etc. etc.

Men have two images to maintain. First is the traditional image of the strong masculine guy who can take on anything without being emotionally impacted. The second is the recent image of a metro-sexual guy who is broadminded and in favor of gender equality. The two images are contradictory, and somewhere the men are losing out big time without being able to voice their concerns. A study paper published by Jarrod Reich shows men are unable to complain publically because:

1. It is against the masculine image to say that they have been forced into unwanted sex. Men are socially supposed to be interested in sex all the time, so they are considered less of a man if they complain about it.
2. A man is physically stronger than a woman, hence the concept that a man can be forced into sex or raped is not considered believable. The gender stereotype is that only men can rape or force sex on women.
3. Sexual violence by women, for example, manipulation tactics, forcing the issue, stalking a man is considered as the women is romantically involved with the man. However, the same behavior from man is considered a criminal offence.

Both genders are equally capable of abusing the other. The shame, humiliation, anxiety, depression and loss of trust are felt by both genders equally. Undermining the issue, or ignoring the issue does not benefit the society. In times to come, harassment by women might be making headlines. And, that will really be a sad state of affairs.

As per Economic Times survey, at entry level women workforce is 40.3% in India and only 6.2% are at board level. Women have a long way to go to obtain equal representation in the workforce at all levels. The road ahead is tough and if women use the wrong means to reach the goals, they might never reach them. Women as well as men, need to show integrity and moral ethics to achieve their ambition. The road to success is incredibly more satisfying when right choices and means are used to achieve it. I hope both genders will stop their war and build a better society collectively.

I am sure some of the readers would have strong opinions on this subject. Please do share them as it will build awareness regarding the issue.